Professional Corporations California
IncSmart California (Small Business and Startups) - California Professional Corporations are for business people who are prohibited from forming a limited liability company or a traditional corporation. Instead, people are required to incorporate as a professional corporation. Business that are required to be professional corporations include are regulated by the state and must have a state license. Realtors, dentists, certified public accountants, doctors, veterinarians, lawyers, optometrists, marriage and family therapists, psychiatrists, and psychologists.

Officers, directors and shareholders of a professional corporation must be licensed to conduct the professional activity. The corporate name of a professional corporation must contain the words, "Professional Corporation", or the abbreviations of "Prof. Corp., or "P.C." or "PC". The original director and stock holder must have a certificate to practice the state regulated profession.

How Tax Savings Works

Save on Social Security Taxes. 15% per year.
Pay yourself a reasonable salary, $12,000. Pay Social Security on this portion of the income.
Pay the rest out of your Professional Corporation in Dividends. No Social Security or Medicare taxes on dividends.
Must have a license to be the Professional Corporation such as a Realtor License.


  • The IRS will require the corporation to pay you a realistic salary for your work as an employee of the corporation. That pay should be reported on W2 and will be subject to the normal employer and employee FICA taxes.
  • By David Oliver

    Starting a Business in California - California Corporation - California LLC

    For 10 years, IncSmart.biz Business Services has helped companies and people from all over the world form California Corporations and California Limited Liability Companies. When you call, email, text, message or live chat with our office, expect personal attention. Small business is the heart of IncSmart.   #incsmart

    Think Smart. Think IncSmart.

    Speak with IncSmart
    Phone: 888-681-9777
    Mon-Fri 8am to 4pm PT


    Registered Agent Services

    AK AL AR AZ CA CO CT DC DE FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS
    MT NC ND NE NH NJ NM NV NY OH OK OR PA RI SC SD TN TX UT VA VT WA WI WV WY

    Did you Receive a Summons ?  Speak with attorney.  Advice from attorney Starting $17/month !


    Add Comment

    ?